NEW DELHI – India is very well placed to tap into the biosimilars opportunities expected in the next 15 years, with its domestic market poised to grow to $40 billion by 2030, against a backdrop of an expected $240 billion growth in the global market, according to a newly released white paper on India's potential in the sector.

Several large Indian companies have invested in biosimilars and have the capability for in-house product development, observes the paper by Hyderabad-based Sathguru Management Consultants and the Associated Chambers of Commerce and Industry in India. The way the authors see it, the Indian biosimilars segment has built a strong foundation but now requires commercial strategies and a policy environment conducive to growth.

Several Indian firms – among them Dr. Reddy's Laboratories Ltd. and Aurobindo Pharma Ltd., both of Hyderabad; Biocon Ltd., of Bangalore; Zydus Cadila Healthcare and Intas Pharmaceuticals Ltd., of Ahmedabad; and others – have already made concerted investments and are poised to participate in that lucrative market.

Most of those companies are largely focused on the Indian market and rest of the world (ROW) markets as initial targets, but typically intend to expand to developed countries going forward. To achieve that expansion, collaborations will be fundamental, particularly to address the three key challenges the industry faces, according to the white paper.

First, the Indian biosimilars industry needs to accelerate the time to market. According to the paper, while the Indian industry has developed a high level of technical capability, given the time sensitivity of biosimilars, asset-level collaborations for technology access could accelerate the time to market and global competitiveness.

Second, the Indian industry needs to be more open toward risk-sharing if it wants to break into developed countries' markets. The U.S. and Europe represent the bulk of the opportunities in biosimilars. With an average investment of more than $150 million needed per asset, a company has to shoulder a binary risk of $600 million to $1 billion in order to build a portfolio of around five assets.

"Risk-sharing co-investment collaborations, both with MNCs [multinational corporations] as well as with other Indian companies can help break this barrier to entry," the paper noted.

Third, the industry needs to expand its ROW markets to ensure commercial sustainability. Collaborations among Indian companies as well as with ROW companies will be critical to pool resources to expand markets, the paper said. While ROW markets are easier to access, financial sustainability will be elusive until markets expand to their true potential.

SUPPORT AND INCENTIVES

The paper also offers some recommendations on the kinds of government policy support needed. First, more nondilutive funding for development is required, as clinical validation investments for developed markets and related risks continue to be a challenge even for large Indian companies. While the investments are manageable for large companies focused on India and other ROW markets, younger technology-driven companies in India have experienced value erosion with the paucity of risk capital for clinical validation of biopharmaceutical products, the paper said.

The Indian government has nondilutive grant funding mechanisms for initial de-risking of technology, but the funding is "negligible" given the long process in biosimilars product development and validation. The current funding mechanisms can support young ventures in the first few stages of development, but more structured funding is needed to de-risk the most capital intensive step of clinical validation for global markets in order for the Indian biosimilars industry to establish a global presence.

Second, while several Indian companies have now built strength across microbial and mammalian technology, technology access at the asset level will be important to accelerate the path to markets. According to the paper, the Indian government needs to extend its current fiscal incentives to corporate investments in technology acquisition, which is the "starting point" of risk investment for companies.

Third, while Indian regulators have been proactive in the early rollout of biosimilars guidelines, there is still a "great need" to fine-tune the regulatory processes to facilitate ease of functioning. That includes dropping several nonconsequential procedural steps such as approvals for toxicology studies, approvals for clone development/import, and approval for contract manufacturing organizations to manufacture clinical trial material.

Lastly, India needs to provide competitive fiscal incentives for attracting global investments for manufacturing, as well as incentives for the Indian industry in more aggressive product development and global commercialization programs.

"Our study highlights two key elements for the Indian industry to succeed in this competitive segment," Pushpa Vijayaraghavan, vice president of Sathguru Inc., told BioWorld Today. "With respect to the regulated markets, we point to the current Goliath vs. Goliath landscape and highlight the need for emerging market companies to collaborate and engage in risk-sharing co-investment models to break into the world's highest value markets.

"With respect to ROW markets, we are particularly concerned about the discouraging level of market expansion, despite the launch of biosimilars to break the affordability barriers. Here again, we urge companies to collaborate more willingly, to co-market biosimilars, intensify the momentum of market penetration efforts and collectively grow the market to its potential. This will be very important in emerging markets such as India."